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G.R. NO. 213400 - ELIDAD KHO AND VIOLETA KHO, PETITIONERS, V. SUMMERVILLE GENERAL MERCHANDISING & CO.,
INC., RESPONDENT.

G.R. No. 213400 - ELIDAD KHO AND VIOLETA KHO, Petitioners, v. SUMMERVILLE GENERAL
MERCHANDISING & CO., INC., Respondent.

SECOND DIVISION

G.R. No. 213400, August 04, 2021

ELIDAD KHO AND VIOLETA KHO, Petitioners, v. SUMMERVILLE GENERAL MERCHANDISING

& CO., INC., Respondent.

DECISION

HERNANDO, J.:

Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court assailing
the October 1, 2013 Decision2 and June 30, 2014 Resolution3 of the Court of Appeals (CA) in CA-G.R.
SP No. 117835, which set aside and annulled the Regional Trial Court's (RTC) July 21, 20104 and
November 18, 20105 Orders in Criminal Case No. 00-183261, directed the RTC to reinstate the
Information for Unfair Competition before it and denied the petitioners' Motion for Reconsideration,
respectively.

Factual Antecedents:

The material and relevant facts are as follows:

Petitioners Elidad Kho (Elidad) and Violeta Kho (Violeta) were charged with Unfair Competition by
respondent Summerville General Merchandising & Co., Inc., (Summerville) before the City
Prosecutor's Office of Manila. On May 31, 2000, a Resolution6 was issued by the City Prosecutor's
Office of Manila recommending the filing of an unfair competition case against petitioners. Thus, an
Information7 for Unfair Competition was filed against petitioners before the RTC Branch 24 docketed
as Crim. Case No. 00-183261.8

The charge as contained in the Information for Unfair Competition provides,

viz.:chanroblesvirtualawlibrary

That on or about January 10, 2000 and for some time prior and subsequent thereto, in the City of
Manila, Philippines, the said accused, conspiring and confederating together and helping one
another, then engaged in a business known as KEC Cosmetic Laboratory, located at 2407 Topacio
Street and 2412 Raymundo Street, San Andres, this City, in an unfair competition, and for the
purpose of deceiving/defrauding the public in general and the Summerville General Merchandising
and Co. (Summerville) which is engaged, among others, in the importation and distribution of
facial cream products with the trademark known as Chin Chun Su, herein represented by Victor
Chua, its General Manager, did then and there willfully, unlawfully, knowingly and jointly
sell/dispose and/or cause to be sold/disposed to the public facial cream products using tools,
implements and equipments in its production, labeling and distribution, which give and depict the
general appearance of the Chin Chun Su facial cream products and likely influence the purchasers
to believe that the same are those of the said Summerville.

CONTRARY TO LAW.9 chanRoblesvirtualLawlibrary

Petitioners filed a Petition for Review10 before the Department of Justice (DOJ) assailing the May 31,
2000 Resolution of the City Prosecutor's Office of Manila. The DOJ affirmed the May 31, 2000
Resolution in a Resolution11 dated August 17, 2000. However, upon motion for reconsideration12 of
petitioners, the DOJ issued the June 18, 2001 Resolution13 which recalled and set aside the August
17, 2000 Resolution but did not rule on the propriety of the complaint. The June 18, 2001 Resolution
merely stated that the case would be further reviewed and the corresponding resolution would be
issued. Meanwhile, petitioners' arraignment14 pushed through on October 11, 2000 where they
refused to enter a plea. Thus, pleas of not guilty were entered for them.15

On September 28, 2001, the DOJ issued a Resolution dismissing the complaint filed against
petitioners, which respondent Summerville assailed through a Motion for Reconsideration.16 On the
basis of the September 28, 2001 Resolution, the prosecution filed with the RTC Branch 24, a Motion
to Withdraw Information.17 The RTC Branch 24 issued an Order18 dated October 24, 2001
withdrawing the Information against petitioners. A Motion for Reconsideration19 was filed by
respondent Summerville before the trial court, while petitioners filed a supplemental motion20
insisting that the case be dismissed on the ground of double jeopardy. On August 21, 2002, the RTC
Branch 24 issued an Order21 holding that in view of its earlier Order withdrawing the Information,
there is no necessity to order the dismissal of the case. According to it, the refiling of the Information
would constitute double jeopardy.22

On September 17, 2002, the DOJ issued a Resolution23 granting the Motion for Reconsideration filed
by respondent Summerville and ordered the Office of the City Prosecutor of Manila to file the
appropriate Information for Unfair Competition against petitioners. Respondent Summerville also filed
a Manifestation24 before the trial court informing it of the September 17, 2002 Resolution of the DOJ,
with prayer for the trial court to reinstate the case. The trial court issued an Order25 dated April 2,
2003 holding that the revival of the case is barred by double jeopardy.26

Respondent Summerville then filed a Petition for Certiorari27 before the CA docketed as CA-G.R. SP
No. 77180 but it was denied due course and dismissed by the appellate court in its Decision28 dated
May 26, 2004. Upon elevation of the case before this Court, a Resolution29 dated August 7, 2007 was
issued in G.R. No. 163741 giving due course to the Petition of respondent Summerville, annulling and
setting aside the CA Decision dated May 26, 2004 as well as the RTC Branch 24 Orders dated August
21, 2002 and April 2, 2003.

The Court ordered the remand of the unfair competition case to the RTC Branch 24 to independently
evaluate the merits thereof and to determine whether or not probable cause exists to hold the
petitioners for trial.30 It bears stressing that the Court in G.R. No. 163741 found that there was
failure on the part of the RTC Branch 24 to independently evaluate and assess the case. The Court
held that a remand of the case is proper to determine if a prima facie case exists against petitioners.
On the issue of double jeopardy, the Court ruled that it does not bar the reinstatement of the
Information and that double jeopardy has not yet set in.31

The case was remanded to RTC Branch 24 of Manila City but the presiding judge therein inhibited
from handling the case. Thus, the case was raffled to RTC of Manila Branch 46 (RTC Branch 46).32

The Ruling of
the Regional
Trial Court,
Branch 46,
Manila:

On July 21, 2010, the RTC Branch 46 issued an Order33 finding no probable cause to hold petitioners
for trial. The dispositive portion of the said Order reads:chanroblesvirtualawlibrary

WHEREFORE, premises considered in compliance to the resolution of the Supreme Court dated 07
August 2007, after evaluating and assessing the merits of the case, this Court finds that no
 probable cause exists to hold the accused for trial. Let the cash bond posted by the accused be
released.

Notify the accused and the private complainant of this Order.

xxx

SO ORDERED.34 chanRoblesvirtualLawlibrary

In arriving at the conclusion that no probable cause exists to hold the accused for trial for unfair
competition, the RTC Branch 46 found that the accused never deceived the public into believing that
the medical facial cream that they sold which is contained in a pink oval-shaped container with
trademark of "Chin Chun Su", were the same as those being imported by respondent Summerville;
and petitioners acted in good faith without intent to deceive the public.

A Motion for Reconsideration35 was filed by respondent but it was denied by the RTC in its Order36
dated November 18, 2010.

Aggrieved, respondent Summerville filed a Petition for Certiorari37 under Rule 65 of the Rules of
Court against petitioners and the judge who rendered the RTC's assailed Orders. The case was
docketed as CA-G.R. SP No. 117835.38 Respondent filed its Comment.39

Ruling of the Court of Appeals:

The appellate court in its assailed Decision40 dated October 1, 2013 granted the Petition for Certiorari
of respondent, the dispositive portion of which reads:chanroblesvirtualawlibrary

WHEREFORE, the Petition is GRANTED. The Order dated July 21, 2010 and the Order dated
November 18, 2010 of the Regional Trial Court, Branch 46, Manila in Criminal Case No. 00-183261,
are SET ASIDE and ANNULLED.

Upon the finality of this Decision, the Regional Trial Court of Manila, Branch 46, is directed to
reinstate the Information for Unfair Competition under Section 168.3 (a) of Republic Act No. 8293,
otherwise known as 'The Intellectual Property Code of the Philippines,' and proceed de novo with
Criminal Case No. 00-183261.chanroblesvirtualawlibrary

SO ORDERED.41 chanRoblesvirtualLawlibrary

The appellate court found that RTC Branch 46 committed grave abuse of discretion amounting to lack
or in excess of jurisdiction when it found no probable cause to indict petitioners for unfair
competition; petitioners are charged with unfair competition and petitioners' product is confusingly
similar to that of respondent; the ordinary purchaser would not normally inquire about the
manufacturer of the product and therefore, petitioners' act of labeling their product with the
manufacturer's name would not exculpate them from liability, especially as both products of
petitioners and respondent bore the name "Chin Chun Su," in oval shaped containers;42 petitioners
may have the right to use the oval-shaped container for their medicated facial cream but the mark
"Chin Chun Su" imprinted thereon is beyond the authority of petitioners' copyright and patent
registration; and there is no double jeopardy as it was even the Court in G.R. No. 163741 which
directed the Manila RTC to independently evaluate the case to determine whether or not probable
cause exists to hold the accused for tria1.43

Petitioners filed a Motion for Reconsideration44 but it was denied in the CA Resolution45 dated 30 June
2014.

Hence, the Petition before Us.

Issues:

Petitioners raised the following grounds for the allowance of their Petition,
viz.:chanroblesvirtualawlibrary

I.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED THAT THE TRIAL COURT
ACTED WITHOUT OR IN EXCESS OF ITS JURISDICTION IN FINDING LACK OF PROBABLE CAUSE
AGAINST PETITIONERS.

II.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED AND ACTED WITHOUT OR IN EXCESS OF
ITS JURISDICTION WHEN IT CORRECTED ERRORS OF JUDGMENT IMPROPERLY RAISED IN A
PETITION FOR CERTIORARI.

III.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED AND VIOLATED PETITIONERS' RIGHT
AGAINST DOUBLE JEOPARDY WHEN IT ORDERED THE CONDUCT OF TRIAL DE NOVO.46 chanRoblesvirtualLawlibrary

Simply put, the threshold issue before Us is whether or not the appellate court erred when it found
probable cause to indict petitioners for Unfair Competition.

Our Ruling

The petition is bereft of merit.

We find no error on the part of the appellate court when it found grave abuse of discretion on the
part of the RTC Branch 46 in finding that no probable cause exists to hold petitioners for trial in the
unfair competition case. The setting aside of the RTC's Orders dated July 21, 201047 and November
18, 201048 is warranted under the circumstance.
As held, "the trial court judge's determination of probable cause is based on his or her personal
evaluation of the prosecutor's resolution and its supporting evidence. The determination of probable
cause by the trial court judge is a judicial function x x x."49chanrobleslawlibrary

The term probable cause does not mean "actual or positive cause" nor does it import absolute
certainty. It is merely based on opinion and reasonable belief. Probable cause does not require an
inquiry into whether there is sufficient evidence to procure a conviction. It is enough that it is
believed that the act or omission complained of constitutes the offense charged.

A finding of probable cause needs only to rest on evidence showing that, more likely than not, a
crime has been committed by the suspects. It need not be based on clear and convincing evidence
of guilt, not on evidence establishing guilt beyond reasonable doubt, and definitely not on evidence
establishing absolute certainty of guilt. In determining probable cause, the average man weighs
facts and circumstances without resorting to the calibrations of the rules of evidence of which he
has no technical knowledge. He relies on common sense. What is determined is whether there is
sufficient ground to engender a well-founded belief that a crime has been committed and that the
accused is probably guilty thereof and should be held for trial. It does not require an inquiry as to
whether there is sufficient evidence to secure a conviction.50 chanRoblesvirtualLawlibrary

It bears to stress that -

a judge must always proceed with caution in dismissing cases due to lack of probable cause,
considering the preliminary nature of the evidence before it. It is only when he or she finds that
the evidence on hand absolutely fails to support a finding of probable cause that he or she can
dismiss the case. On the other hand, if a judge finds probable cause, he or she must not hesitate
to proceed with x x x trial in order that justice may be served.51 chanRoblesvirtualLawlibrary

In the present case, We find that the acts complained of constituted probable cause to charge them
with Unfair Competition.

Section 168 (3a) of the Intellectual Property Code provides:chanroblesvirtualawlibrary

SECTION 168. Unfair Competition, Rights, Regulation and Remedies. - x x x

xxx

168.3. In particular, and without in any way limiting the scope of protection against unfair
competition, the following shall be deemed guilty of unfair competition:

(a) Any person, who is selling his goods and gives them the general appearance of goods of
another manufacturer or dealer, either as to the goods themselves or in the wrapping of the
packages in which they are contained, or the devices or words thereon, or in any other feature of
their appearance, which would be likely to influence purchasers to believe that the goods offered
are those of a manufacturer or dealer, other than the actual manufacturer or dealer, or who
 otherwise clothes the goods with such appearance as shall deceive the public and defraud another
of his legitimate trade, or any subsequent vendor of such goods or any agent of any vendor
engaged in selling such goods with a like purpose; x x x

The essential elements of an action for unfair competition are: (1) confusing similarity in the general
appearance of the goods, and (2) intent to deceive the public and defraud a competitor.52 The
confusing similarity may or may not result from similarity in the marks, but may result from other
external factors in the packaging or presentation of the goods. Likelihood of confusion of goods or
business is a relative concept, to be determined only according to peculiar circumstances of each
case.53 The element of intent to deceive and to defraud may be inferred from the similarity of the
appearance of the goods as offered for sale to the public.54

Here, petitioners' product which is a medicated facial cream sold to the public is contained in the
same pink oval-shaped container which had the mark "Chin Chun Su," as that of respondent. While
petitioners indicated in their product the manufacturer's name, the same does not change the fact
that it is confusingly similar to respondent's product in the eyes of the public. As aptly found by the
appellate court, an ordinary purchaser would not normally inquire about the manufacturer of the
product.55 Petitioners' product and that solely distributed by respondent are similar in the following
respects "1. both are medicated facial creams; 2. both are contained in pink, oval-shaped containers;
and 3. both contain the trademark "Chin Chun Su" x x x The similarities far outweigh the differences.
The general appearance of (petitioners') product is confusingly similar to (respondent)."56 Verily, the
acts complained of against petitioners constituted the offense of Unfair Competition and probable
cause exists to hold them for trial, contrary to the findings of RTC Branch 46.

Unfair competition is always a question of fact.57 In line with this, We find that with the existence of
probable cause on hand, it would serve the ends of justice if the parties would be able to present
their respective claims and defenses in a full-blown trial. For now, it is sufficient that probable cause
exists to hold petitioners for trial for the unfair competition case filed against them. Thus, the
appellate court did not err when it directed the trial court to reinstate the Information and proceed
with the criminal case before it.

The CA's directive to the RTC Branch 46 to reinstate the Information for Unfair Competition against
petitioners did not violate the latter's right against double jeopardy.

The proscription against double jeopardy presupposes that an accused has been previously charged
with an offense, and the case against him is terminated either by his acquittal or conviction, or
dismissed in any other manner without his consent. As a general rule, the following requisites must
be present for double jeopardy to attach: (1) a valid indictment, (2) before a court of competent
jurisdiction, (3) the arraignment of the accused, (4) a valid plea entered by him, and (5) the acquittal
or conviction of the accused, or the dismissal or termination of the case against him without his
express consent.58

In this case, petitioners failed to prove that the abovementioned requisites have been complied with.
In fact, the issue of whether or not double jeopardy has set in has already been resolved by this
Court in its Resolution dated August 7, 2007 in G.R. No. 163741.59 This Court in G.R. No. 16374160
made a clear pronouncement that reinstatement of the Information against petitioners is not barred61
and that double jeopardy has not set in.62

From the foregoing disquisition, We find that the CA did not err in rendering its assailed Decision and
Resolution.

WHEREFORE, the Petition for Review on Certiorari is DENIED. The October 1, 2013 Decision and
June 30, 2014 Resolution of the Court of Appeals in CA-G.R. SP No. 117835 are
AFFIRMED.chanroblesvirtualawlibrary

SO ORDERED.

Perlas-Bernabe, Senior Associate Justice, (Chairperson), Inting, Gaerlan, and Rosario,*JJ.,

concur.chanrobleslawlibrary

Endnotes:

* Designated as additional Member per S.O. No. 2835 dated July 15, 2021.

1Rollo, pp. 3-31.

2 Id. at 42-58; penned by Associate Justice Victoria Isabel A. Paredes and concurred in by
Associate Justices Japar B. Dimaampao and Elihu A. Ybañez.

3 Id. at 59-60.

4 Id. at 84-101.

5 Id. at 102-110.

6 CA rollo, pp. 61-64.

7Rollo, p. 34.

8 Id. at 33-34.

9 Id. at 7, 34.

10 CA rollo, p. 4.

11 Id. at 77-83.
12 Id. at 4.

13 Id.

14Rollo, p. 8.

15 Id.

16 CA rollo, pp. 84-92.

17Rollo, p. 35.

18 Id. 6-8, 33-35.

19 Id. at 36.

20 Id.

21 CA rollo, pp. 160-161.

22Rollo, pp. 36-37.

23 CA rollo, pp. 145-153.

24 Id. at 167-168.

25 Id. at 185.

26Rollo, pp. 35-36.

27Rollo, p. 33.

28 Id. at 40.

29 Id. at 9.

30 Id. at 9, 40.

31 Id. at 39-40.

32 Id. at 43, 84, 89.

33 Id. at 84-101.
34 Id. at 101.

35 Id. at 102-103.

36 Id. at 102-110.

37 Id. at 61-68.

38 Id.

39 Id. at 111-128.

40 Id. at 42-58.

41 Id. at 57.

42 Id. at 49-51.

43 Id. at 54-57.

44 Id. at 72-82.

45 Id. at 59-60.

46 Id. at 11.

47 Id. at 84-101.

48 Id. at 102-110.

49Maza v. Turla, 805 Phil. 756, 756 (2017).

50 Imingan v. The Office of the Honorable Ombudsman, G.R. No. 226420, March 4, 2020, citing
Philippine Deposit Insurance Corp. v. Hon. Casimiro, 768 Phil. 429 (2015).

51Mendoza v. People, 733 Phil. 603, 615, (2014).

52 Asia Pacific Resources International Holdings, Ltd. v. Paperone, Inc., G.R. Nos. 213365-66,
December 10, 2018.

53 Id.

54 Id.
 55Rollo, p. 49.

56 Id. at 49-50.

57Asia Pacific Resources International Holdings, Ltd. v. Paperone, Inc., supra.

58Condrada v. People, 446 Phil. 635, 641, (2003).

59Rollo, p. 33.

60 Id.

61 Id. at 39.

62 Id. at 40.cralawredlibrary

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